Unit 2: Expenditure and Income Approach to GDP

1/31/17

Expenditure Approach

• Spending within the economy
• Expenditure Approach to GDP= C+Ig+G+Xn

Income Approach

• Money that flows within the economy 
• WRIP+Statistical adjustment 

*Keep in mind that both of these numbers are supposed to be the same*

2/1/17

Trade=(exports-imports)

• Positive=Surplus
• Negative=Deficit

Budget=Government purchases of goods and services+Government transfer payments-Government tax and fee collection

• Positive= Deficit
• Negative=Surplus

Calculating Income

1.  (Compensation of employees+ Rental income+Interest income+ Proprietors Income+ Corporate profits)
2.  GDP-Indirect business taxes- Depreciation- Net foreign factor payment

Calculating Disposable Income 

1. (National income- Personal household taxes+ Government transfer payments)